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The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019. The person responsible for making this announcement on behalf of the Company is Rory Mepham.
24 April 2024
Sancus Lending Group Limited
(the "Group" or the "Company")
Trading Update and Capital Strengthening
The Board of the Company today provides an update on the Group's unaudited results for the year ended 31 December 2023 and announces a strengthening of the Group's capital position.
At the year-end the Group had pro-forma loans under management of £208m, an increase of 23% (31 December 2022: £169m). The increase reflects growth in our Irish loan book, which grew strongly from £21m to £32m as at 31 December 2023 and also the pro-forma impact of the joint venture we announced with Hawk Lending Limited in Jersey on 5 December 2023. As at 31 December 2023 the pro-forma Jersey loan book was £114m (31 December 2022: £70.5m). The UK loan book was broadly flat at £63m (31 December 2022: £65.9m).
During the year the Group increased its turnover by 24% to c. £12.4m (31 December 2022: £10.0m). This growth reflects progress in our UK and Irish businesses in particular. Overall, the Company now currently estimates that it will report an operating loss of between £9.5m to £10.0m for the year ended 31 December 2023 (31 December 2022: £(4.7)m). This primarily reflects the estimated impact of anticipated IFRS9 write-downs on legacy loans written prior to the current senior management team joining the business. The Board remains committed to returning the Group to profitability and is confident in the strategic actions it is taking to achieve this.
One of these strategic actions includes ensuring that the Group maintains sufficient financial strength and liquidity in order that it can execute its strategy. Sancus Loans Limited ("Sancus Loans") is a wholly-owned subsidiary of the Group that, as at 31 December 2023, funded £77.75m of its loans and which is primarily financed by a financing facility provided by funds managed by Pollen Street Capital. The Group is pleased to announce that Somerston Fintech Limited ("Somerston Fintech"), a subsidiary of Somerston Group, the majority shareholder of the Company, has subscribed for £5,000,000 of preference shares (the "Preference Shares") in Sancus Loans (the "Subscription"). The Preference Shares will be issued with a non-cash, cumulative coupon rate of 15% and a maturity date of 23 November 2026. The proceeds of the Subscription will be used to strengthen the liquidity of Sancus Loans. The Group also expects that approximately £4m of these proceeds will be available for transfer from Sancus Loans to other Group subsidiaries in order to provide the Group with additional corporate flexibility and working capital.
Related party transaction
Somerston Fintech is a related party to the Company in accordance with the AIM Rules, by virtue of Somerston Fintech's shareholding in the Company. Accordingly, the issue of the Preference Shares to Somerston Fintech constitutes a related party transaction for the purposes of AIM Rule 13 of the AIM Rules for Companies. The independent directors (being the Company's directors with the exception of Tracy Clarke) consider, having consulted with the Company's nominated adviser, Liberum Capital, that the terms of the transaction are fair and reasonable insofar as its independent shareholders are concerned.
Notice of Annual Results
The Group will release its audited results for the year ended 31 December 2023 in June 2024.
For further information, please contact:
Sancus Lending Group Limited
Rory Mepham
Keith Lawrence
+44 (0)1481 708 280
Liberum Capital (Nominated Adviser and Corporate Broker)
Chris Clarke
William King
+44 (0) 20 3100 2000
Instinctif Partners (PR Adviser)
Tim Linacre
Vivian Lai
+44 (0)207 457 2020
Apex Group Ltd
Matt Falla
Nicola Momberg
+44 (0)1481 755530
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